G.L.S. & Associates, Inc. v. Rogers

155 So. 3d 263, 38 I.E.R. Cas. (BNA) 676, 2014 Ala. Civ. App. LEXIS 87, 2014 WL 1978846
CourtCourt of Civil Appeals of Alabama
DecidedMay 16, 2014
Docket2130322
StatusPublished
Cited by1 cases

This text of 155 So. 3d 263 (G.L.S. & Associates, Inc. v. Rogers) is published on Counsel Stack Legal Research, covering Court of Civil Appeals of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
G.L.S. & Associates, Inc. v. Rogers, 155 So. 3d 263, 38 I.E.R. Cas. (BNA) 676, 2014 Ala. Civ. App. LEXIS 87, 2014 WL 1978846 (Ala. Ct. App. 2014).

Opinion

THOMAS, Judge.

Keith Rogers was employed as a registered representative of G.L.S. & Associates, Inc., and G.L. Smith & Associates, Inc. (hereinafter collectively referred to as “GLSA”), until he resigned from his employment in January 2013. Rogers solicited and effected the sale of securities for GLSA; thus, Rogers is a securities broker.1 His employment agreement required that he be a registered representative of the National Association of Securities Dealers (“NASD”), which is now known as the Financial Industries Regulatory Agency (“FINRA”). The employment agreement also provided, among other things, that

“[Rogers] will strictly comply with the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Company Act of 1940, the Securities Exchange Commission, the National Association of Securities Dealers, and state securities act administrators, and the rules and regulations of all governing bodies having jurisdiction over securities activities.”

The employment agreement contained a nonsolicitation provision, which read as follows:

“WHEREAS, [Rogers] desires continued employment with [GLSA] and pay[265]*265ment of salary and/or commissions in accordance with the terms and conditions set forth below.
“WHEREAS, [Rogers] expressly covenants and agrees that any and all business accounts at any time or times procured, handled, or managed by [Rogers] while employed by [GLSA] are and shall be the exclusive property of [GLSA] for its exclusive benefit to the extent described under this Agreement;
“WHEREAS, [Rogers] recognizes and acknowledges that [GLSA’s] accounts and information relating to [GLSA’s] clients are valuable and unique assets of [GLSA],
“NOW, THEREFORE, in consideration of the premises and covenants contained within this Agreement, [Rogers] agrees to the following:
“1. Upon termination of employment for any reason whatsoever, [Rogers] will not, for a period of two (2) years from the date of termination directly or indirectly, either as an individual or as the agent, representative, stockholder, or employee of another or in any other manner:
“(a) Quote rates of stocks, bonds or commodities, or provide any investment counseling services, advice or other investment related services similar to those provided by [GLSA] for any person, firm or corporation residing or located within the State of Alabama or otherwise within a fifty-mile radius of Huntsville, Alabama, that is a client of [GLSA] and for which [Rogers], during the course of his or her employment, shared commissions with any other broker, agent, representative or employee of [GLSA], or otherwise directly or indirectly suggest, advise, induce or attempt to persuade any such clients of [GLSA] to discontinue any business or investment relations with [GLSA];
“(b) Divulge the names, addresses, or other information concerning the clients and accounts of [GLSA] or any other confidential information acquired during employment by [GLSA] to any person, firm, corporation, association, or other entity for any purpose whatsoever.
“(2) The provisions of this Agreement between [Rogers] and [GLSA] shall extend to any successor corporation of [GLSA], and the surviving corporation shall possess all the rights and privileges of enforcement under this Agreement.
“(3) The provisions of this Agreement shall be governed by the laws of the State of Alabama.
“(4) All of the provisions of this Agreement are distinct and severable, and if any provision shall be held illegal or void, it shall not affect the validity or legality of the remaining provisions of this Agreement.
“(5) In the event of breach of this Agreement by [Rogers], [GLSA] shall be entitled to any and all damages caused by the breach, including but not limited to litigation expenses and attorney’s fees.”

In June 2013, GLSA sued Rogers and another former employee, Kelly C. Clary, alleging that they had violated the nonsoli-citation provisions of their employment agreements by attempting to solicit clients of GLSA; GLSA attached the employment agreements executed by Rogers and Clary to its complaint. GLSA later voluntarily dismissed its claim against Clary. Rogers then moved the trial court to dismiss GLSA’s claim against him.

Rogers argued in his motion to dismiss that the nonsolicitation provision in the [266]*266employment agreement was unenforceable as a matter of law because being a securities broker in the business of purchasing and selling securities was a profession, which he could not be restricted from practicing under Ala.Code 1975, § 8-1-1. Section 8-1-1 reads, in pertinent part:

“(a) Every contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind otherwise than is provided by this section is to that extent void.
“(b) One who sells the good will of a business may agree with the buyer and one who is employed as an agent, servant or employee may agree with his employer to refrain from carrying on or engaging in a similar business and from soliciting old customers of such employer within a specified county, city, or part thereof so long as the buyer, or any person deriving title to the good will from him, or employer carries on a like business therein.”

The predecessor statutes to § 8-1-1— Code 1940 (Recomp. 1958), Title 9, §§ 22-24 — were construed to permit nonsolicitation agreements between an employer and an employee in certain circumstances, unless the agreement attempted to prohibit a person from practicing a profession. See Odess v. Taylor, 282 Ala. 389, 211 So.2d 805 (1968).

“Even a specific covenant not to compete in a profession, trade, or business is void under [Ala.Code 1940 (Re-comp.1958), Title 9,] Section 22 ... unless within the limited exceptions created by [Ala.Code 1940 (Recomp.1958), Title 9,] Section 23.... Joseph v. Hopkins, 276 Ala. 18, 158 So.2d 660 [(1963)].
“As pointed out in Parker v. Ebsco Industries, Inc., 282 Ala. 98, 209 So.2d 383 [(1968)], Section 23 originally applied only to the sale of the good will of a business (Section 6827, Code of 1923) but the section was amended in 1931 to extend to the relationship of employer and employee.
“The question is thus presented as to whether the legislature intended by Section 23 that one practicing a profession should be considered in the category of an employee as that term is understood in the usual trade or commercial sense.
“It is significant that the term ‘profession’ is omitted in Section 23. Said section pertains to a ‘business’ to an ‘agent, servant, or employee’ and to soliciting old ‘customers’ of a former ‘employer.’
“Having included ‘profession’ in Section 22, and omitted this term in Section 23, an affirmative inference is created that the legislature did not intend to include professions in Section 23, such interpretation being aided by resort to the maxim ‘expressio unius est exclusio alterius.’ See Weill v. State ex rel. Gaillard, 250 Ala. 328, 34 So.2d 132 [(1948)]; City of Birmingham v. Brown, 241 Ala.

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Bluebook (online)
155 So. 3d 263, 38 I.E.R. Cas. (BNA) 676, 2014 Ala. Civ. App. LEXIS 87, 2014 WL 1978846, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gls-associates-inc-v-rogers-alacivapp-2014.